LyondellBasell swings to Q2 net income following US bankruptcy exit

16 August 2010 14:06[Source: ICIS news]

LONDON (ICIS)--LyondellBasell swung to a second-quarter net income of $8.84bn (€6.89bn), compared with a loss of $353m in the same period last year following its exit from US Chapter 11 bankruptcy protection, the company said on Monday.

Sales and other operating revenues for the second quarter rose by 40% year on year to $10.5bn amid continued strong ethylene margins in the US, LyondellBasell said.

Excluding a net $8.64bn after-tax gain on the discharge of liabilities subject to compromise related to its emergence from US Chapter 11 bankruptcy protection, LyondellBasell said it recorded a second-quarter net income of $203m.

“We emerged from Chapter 11 as a much stronger company,” said LyondellBasell CEO Jim Gallogly.

“Our significantly improved capital and cost structures, coupled with our industry-defining technologies and new management team, position us as a formidable competitor for the future,” he added.

Gallogly said that strong ?xml:namespace>US ethylene margins experienced late in the first quarter had continued into the second quarter, while European olefins and polyolefins results also improved due to higher margins across most of its products.

The CEO added that the company’s strong performance in its intermediates and derivatives segment continued through the second quarter.

“Industry refining spreads remained close to where they finished the first quarter, and oxyfuel margins and volumes experienced their normal seasonal uptick,” he said.

Looking ahead, the company said that the US ethylene market was in the process of rebalancing following the turnarounds and unplanned industry downtime of the second quarter; in Europe, unplanned industry outages had resulted in improved olefin plant co-product margins.

“We took advantage of supply-driven market tightness in several of our businesses during the first half of the year,” said Gallogly.

“The rates at which the world economy recovers and new capacity comes online in the Middle East and Asia will significantly influence operating rates and margins going forward,” he added.